How to Use Accounts Receivable Financing to Grow Your B2B Business

Many B2B business owners believe that in order to obtain growth and expansion, you either need to get a loan from a bank, take out a cash advance loan or rely on business credit cards to cover the extra expenses associated with growth.

However, bank loans for businesses have become increasingly difficult to get approved for, and the interest rates for cash advance loans or credit cards have reached sky-high levels. Now, these traditional options may not be possible – or even desirable – for many businesses.

What is accounts receivable financing?

Accounts receivable financing works by using the valuable assets your business already has as collateral to free up extra working capital when you need it. For many businesses especially serviced based, the most valuable assets they have are their accounts receivable.

By using your outstanding invoices as the basis for a working capital line of credit, you can ensure that your business has sufficient money to meet payroll, cover expenses, or invest in growth or upcoming projects. Simply borrow against the invoices that your customers are going to pay in the future to obtain the cash your business needs.

How can accounts receivable financing help my business grow?

One of the great things about accounts receivable financing is that it provides a lot of flexibility, so you can take advantage of opportunities when they present themselves

For example, imagine you just completed a large project that required a sizeable investment in materials or employee time. The company has the invoice, but has not paid it yet, and is not expected to for another 60 days.

Then, you receive a call about a huge opportunity for a new project or client that could help you really put your business on the map. It’s so exciting! As an entrepreneur, this is what you have been waiting for!

Unfortunately, because you invested so much of your assets into the former job and have not received payment, your company does not have the working capital on hand in order to finance this new endeavor. You could apply for a bank loan. However, the approval process could take weeks, and if you get denied, you may be forced to destroy this new partnership by pulling out of a deal that you agreed to. Alternatively, if you wait, you may miss this amazing new opportunity when they decide to go with a company that could commit to their time frame.

Cash advance loans could assist with your expenses but the aggressive payback period and interest rates, coupled with allowing another company to automatically draft funds from your account on a daily basis can be quite concerning. Business credit cards could help pay for materials, but what about payroll for your employees? You will also need enough available credit, and if you did max out these cards, how much money would you be losing to interest payments? You don’t want to be buried in credit card debt and still have to explain to your employees why they don’t have a paycheck.

Thankfully, there is another way. You can apply for a working capital line of credit with Allied Financial Corporation and get a verbal proposal for financing during our first meeting as part of our Express Financing Approval program. You can then accept the new opportunity with confidence, as you know that you will have the working capital on hand to cover any materials you need to in order to complete this new job as well as payroll.

Quick, simple, and completely customizable to your unique business needs, Allied Financial Corporation can offer you a working capital line of credit ranging from $25,000 – $2,000,000 that lets you have access to the money you need, when you need it. That way, you can grab every qualified opportunity to grow your business when they come your way.

See how we’ve helped other B2B businesses grow by checking out our testimonials page!

Learn How Allied Financial Can Help Grow Your Business

If you’ve been turned down by traditional banks or if traditional financing doesn’t fit the needs of your company, call Allied Financial at 770-730-0101 or fill out our online contact form to discover how we can help your business grow.